How Much Discretion does Obama Have Over Sequester Cuts?

As we approach the increasingly likely sequestration cuts, a debate is emerging over exactly how much discretion the President and his Office of Management and Budget (OMB) have over how the cuts are applied. Not surprising, this question has a partisan dimension. For example, in a sequestration FAQ released by House Budget Committee Democrats the answer is “almost none” while Republicans and conservatives are suggesting that Obama has a lot of discretion over how to apply the cuts.

Like many things, the answer is somewhere between the partisan extremes. It is true that the sequester is to be applied at the level of the budget account rather than the agency or program. This of course limits the ability of the OMB to shift monies around in response to the mandated cuts. Of the 897 accounts subject to sequester (Social Security, Medicare, and some Defense personnel accounts are exempt), some are quite small and targeted to specific activities. Those activities will clearly face the full brunt of the cuts. But some accounts are huge. For example, the National Institutes of Health has one $35 billion account that consolidates 25 different activities. So OMB will have lots of discretion in managing those cuts. Another source of discretion is that “all agencies will continue to have their existing transfer authority with the limitations that are specific to each agency.” In other words if agencies were allowed to shift money between accounts before, that authority would not be affected by the sequester. So some agencies will have the ability to cut less in some areas and more in others. Other pieces of evidence suggesting that the OMB plans to exercise more discretion than revealed in its September 14 sequester report is that it has more or less issued a gag order against agency officials from talking about the effects of sequestration cuts.

The stakes of the political debate are heightened precisely because the extent of presidential and OMB discretion is not very transparent. For example, the president can say that the sequestration will force him to furlough air traffic controllers and Transportation Security agents, but it will be very hard to determine whether or not those cuts were inevitable. Thus, we should expect a nice round of blame-game politics where Republicans charge that president has politically manipulated the cuts to make the public (especially those in bluish Republican congressional districts) feel all the pain. And the Republicans might be right, but they’ll have a tough time proving it.

6 Responses to How Much Discretion does Obama Have Over Sequester Cuts?

“Thus, we should expect a nice round of blame-game politics where Republicans charge that president has politically manipulated the cuts to make the public (especially those in bluish Republican congressional districts) feel all the pain. And the Republicans might be right, but they’ll have a tough time proving it.”

How tough a time the Republicans will have proving it depends in considerable part on whether journalists and academic commentators pursue the line of inquiry Professor McCarty suggests and report and discuss the truth about the sequester. Based on past experience, that means he’s right, the Republicans will be voices in the wilderness.

The following sentence is incorrect and oversimplified: “It is true that the sequester is to be applied at the level of the budget account rather than the agency or program.” There are exempt and non-exempt accounts; for non-exempt accounts, cuts are initially supposed to be applied at the “program, project, and activity” (PPA) level. How PPAs are defined varies significantly across agencies, as do transfer and reprogramming authorities.

Roy’s point should be more fully stated. The BCA includes a provision that the “same percentage sequestration shall apply to all programs, projects, and activities within a budget account.” Plainly, OMB and program administrators will have residual discretion. And Congress will be in a weak position to respond to broader discretion that might be exercised by the executive branch. But the BCA was unusually restrictive.

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